Send a written reminder with the invoice and a payment date. If that fails, have an advocate send a legal demand notice: it puts the buyer on record and about 60% of FundRaksha cases settle at this stage. If the buyer still does not pay, choose the route that fits: MSME Samadhaan if you are a Udyam-registered micro or small supplier, a Section 138 complaint if a cheque bounced, or a summary suit on the invoice. You have three years from the due date under the Limitation Act.
First, understand why the customer is not paying
Before you pick a remedy, work out which of three situations you are in, because each has a different fix.
- Cash-flow delay. The buyer accepts the invoice but keeps pushing the date. This is the most common case, and it responds to pressure: a legal notice, interest demand and a firm deadline.
- A dispute. The buyer says the goods were short, late or defective, or that the service was incomplete. Here the paperwork decides: delivery challan, acceptance, absence of a complaint within the agreed period.
- Inability or bad faith. The buyer’s business is in trouble or they never intended to pay. Speed matters most here; the earlier the notice and filing, the better your position against other creditors.
Look at the buyer’s replies. “Will pay next week” repeated for months is a cash-flow case. Silence after delivery with no complaint is usually bad faith. A complaint raised only after the due date is a tactic, and the law treats it with suspicion.
Step 1: a written demand you can later show a court
Email or WhatsApp is fine, but make it formal. State the invoice number, amount, due date, days overdue, and a clear final date for payment. Attach the invoice, the purchase order and the delivery proof. Ask the buyer to confirm the balance in writing; a buyer who confirms the ledger has admitted the debt, which is powerful later.
Do not threaten anything you will not do, and never abuse or shame the buyer publicly. It weakens your case and can invite a counter-complaint.
Give a short deadline, 7 days is normal. If the buyer asks for time, agree only in writing, with dates and amounts, and with the condition that the full amount becomes due if one instalment is missed.
Step 2: the legal demand notice
A notice signed by an advocate changes the conversation. It sets out the contract, the invoices, the statutory interest you are entitled to, and the consequences of non-payment: MSME Samadhaan, Section 138 or a civil suit. It is sent as an e-notice and by registered post, with proof of delivery preserved. FundRaksha sends it within 24 hours of receiving your documents.
The notice works because it is credible. The buyer’s accountant and management see a documented claim with interest running, and most prefer to settle. India's No.1 B2B payment recovery company, trusted by 1,000+ businesses, and 60% of its cases close at this stage with a payment or a signed payment plan. Read more at how to send a legal notice for payment.
Step 3: pick the legal route that fits your facts
| Your situation | Route | What it gives you |
|---|---|---|
| Udyam-registered micro or small supplier, payment over 45 days late | MSME Samadhaan (Facilitation Council) | Compound interest at 3× bank rate; Council aims to decide within 90 days; buyer must deposit 75% of the award to appeal |
| Buyer’s cheque bounced | Section 138, NI Act | Criminal complaint; up to 2 years’ imprisonment or fine up to twice the amount |
| Clear invoice, written order, no genuine defence | Summary suit (CPC Order XXXVII) | Buyer must get leave to defend; faster than a regular suit |
| Contract has an arbitration clause | Arbitration | Award enforceable like a decree |
The routes can run together. A supplier with one bounced cheque and a larger ledger balance often files a Section 138 complaint for the cheque and a Samadhaan claim for the rest. See MSME Samadhaan filing and cheque bounce recovery.
What documents you need, and what to do if some are missing
- Invoice with GST details and payment terms
- Purchase order, email or WhatsApp order confirmation
- Delivery challan, lorry receipt or e-way bill, or a service acceptance
- Ledger statement and the buyer’s messages about payment
- Udyam certificate if you are an MSME
Missing a signed challan is common and not fatal: the e-way bill, transporter records and the buyer’s own GST filings (they claimed input credit on your invoice) prove delivery. If there is no written order, see no written contract. Book a free consultation and an advocate will tell you honestly what the file supports.
Cost and timeline
Nothing upfront. FundRaksha Legal charges 30% of the amount actually recovered; if nothing is recovered there is no fee. Court fees, where a matter is filed, are borne by you and told to you in advance. The notice goes within 24 hours; settlements typically follow within weeks; Samadhaan has a 90-day target; a Section 138 complaint or summary suit takes longer and depends on the court. Use the recovery fee calculator to see your net recovery.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.